Correlation Between Highland Global and Causeway International
Can any of the company-specific risk be diversified away by investing in both Highland Global and Causeway International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Highland Global and Causeway International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Global Allocation and Causeway International Small, you can compare the effects of market volatilities on Highland Global and Causeway International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Highland Global with a short position of Causeway International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Global and Causeway International.
Diversification Opportunities for Highland Global and Causeway International
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Highland and Causeway is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and Causeway International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway International and Highland Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Highland Global Allocation are associated (or correlated) with Causeway International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway International has no effect on the direction of Highland Global i.e., Highland Global and Causeway International go up and down completely randomly.
Pair Corralation between Highland Global and Causeway International
Assuming the 90 days horizon Highland Global Allocation is expected to generate 1.19 times more return on investment than Causeway International. However, Highland Global is 1.19 times more volatile than Causeway International Small. It trades about 0.12 of its potential returns per unit of risk. Causeway International Small is currently generating about -0.13 per unit of risk. If you would invest 1,165 in Highland Global Allocation on October 31, 2024 and sell it today you would earn a total of 128.00 from holding Highland Global Allocation or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Global Allocation vs. Causeway International Small
Performance |
| Timeline |
| Highland Global Allo |
| Causeway International |
Highland Global and Causeway International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Global and Causeway International
The main advantage of trading using opposite Highland Global and Causeway International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Global position performs unexpectedly, Causeway International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Causeway International will offset losses from the drop in Causeway International's long position.| Highland Global vs. Franklin Adjustable Government | Highland Global vs. Aig Government Money | Highland Global vs. Voya Government Money | Highland Global vs. Inverse Government Long |
| Causeway International vs. Scharf Global Opportunity | Causeway International vs. Nasdaq 100 Index Fund | Causeway International vs. T Rowe Price | Causeway International vs. Dgi Investment Trust |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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